Annual Report Annual Report 2014.pdf · 18 May 2014 – Saba Nour Steel Raw Materials Supply-ing...

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In the Name of God

Tehran Stock Exchange

Annual ReportFiscal Year Ended 20 March 2015

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TSE at a glance

Financial digest

Market information

Time line

Board message

1-Iintroduction to TSE and financial performance

2-Market operations overview

3-Corporate governance

4-Annual achievements

5-Board proposal

6-Future plans

Financial statements, independent auditor’sreport and explanatory notes

Contents

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Tehran Stock ExchangeAnnual Report

Fiscal Year Ended 20 March 2015

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Trading

Trading days Saturdays - Wednesdays

Trading hours )pre-opening 8:30 – 9:00( 9:00 – 12:30

Trading system Fully automated order based

Trading mechanism Opening auction / continuous

Market making Arbitrary

Tradable instruments Shares, rights, participation bonds, single stock futures,embedded put options, ETFs, sukuks and CDs

Currency Iranian Rial

Online accessible information Opening, minimum, maximum and closing( prices,( indices, listed companies information, trading data andquotes

TSE at a glance

Depository, clearing and settlement

Entity Central Securities Depository of Iran (CSDI)

Settlement period T+3 (shares, derivatives and ETFs), T+1 (bonds, fixed-in-(come securities

Settlement Funds settlement at broker level, securities dematerialized settlement at client

Clearing Multilateral netting

Short selling N/A

Tax

Dividends Exempted

Capital gain Exempted

Transaction )seller( of trading value 0.5%

Structure and regulations

Legal structure Public company

Regulations Self-regulated under SEO’s surveillance

Daily price fluctuation limit Shares: ±4%, rights: ±8%, bonds: ±1%

Closing price calculation Weighted average based on base volume

Foreign investment Available )Foreign investment bylaw(

TEHRANSTOCK EXCHANGE

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Trading Commission

Buyer )%( Seller )%( Total )%(

SEO 0.032 0.048 0.08

TSE 0.032 0.048 0.08

Brokerage Firm 0.4 0.4 0.8

CSDI 0.01 0.015 0.025

TSETMC 0.012 0.018 0.03

Total 0.486 0.529 1.015

Markets and Listing Requirements

First Market / main board First market / secondary board Second market

Minimum paid-in Capital )IRR billion(

1,000 500 200

Minimum years of busi-ness activity

3 2 1

Minimum free-float )%( 20 15 10

Minimum number ofshareholders

1,000 750 250

Profitability )years( 3 2 1

Equity/total assets )%( 30 20 15

Issuers information

First Market main board First market secondary board Second market Total

Listed companies 63 61 190 314

Brokerage firms

Tehran Provinces - regions Total

Number of brokerage firms )entities( 97 4 101

Trading stations 703 711 1,414

On-line trading access providers 89 4 93

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Board of directors

Financial digest

Member Delegate Position

Mellat Financial Group Mr. Mohammad Ebrahim MohammadPourzarandi

Chairman of the Board

Mofid Brokerage Firm Mr. Ali Yar Salehi Vice Chairman of the Board

Bank Tejarat Brokerage Firm Mr. Seyed Mojtaba Fahim Hashemi Member of the Board

Bahman Investment Company Mr. Ali Rostami Member of the Board

Saba Ta’min Investment company Mr. Mohammad Reza Rostami Member of the Board

Pasargad Arzesh Afarinan Group Mr. Ali Akbar Amin Tafreshi Member of the Board

Tadbir Investment company Mr. Mojtaba Taghipour Member of the Board

------------------- Hassan Ghalibaf Asl CEO and President

A summary of financial information (IRR billion)

Operations Fiscal Year 20 Mar.2015

Fiscal Year 20 Mar.2014

Fiscal Year 20 Mar.2013

Operating revenues 514 684 295

Total expenses 272 221 162

Operating income 242 463 146

EBIT 389 574 199

Net income 327 458 162

Cash flows from operations 230 534 146

EPS )IRR( 364 509 360

Financial status

Current assets 510 619 233

Total assets 1,451 1,228 692

Total liabilities 171 226 89

Registered capital 900 450 300

Total equities 1,280 1,002 603

Equity shares

Number of shares )million( 900 450 300

Last EPS forecast )IRR( 463 1,080 476

Real EPS )IRR( 364 1,018 545

DPS )IRR( - 110 200

Other information

Number of staff 267 263 258

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Market information

Monthly trading trend

Market indicators Fiscal Year 20 Mar. 2015

Fiscal Year 20 Mar. 2014


Market capitalization )IRR billion( 2,813,156 3,865,970 1,707,498

Nominal Value )IRR billion( 954,198 725,810 506,498

Market cap / nominal value 2.9 5.3 3.4

Average P/E 5.43 7.06 5.35

Trading information Fiscal Year 20 Mar. 2015



Normal trading value )IRR billion( 377,119 701,846 219,615

Normal trading volume )million shares( 144,646 164,433 68,856

Total trading value )IRR billion( 542,522 975,715 364,334

Total trading volume )million shares( 165,184 189,780 80,163

Number of transactions )thousand( 12,916 17,142 5,241

Daily average trading value )IRR billion( 2,251 4,015 1,106

Average daily trading volume )million shares( 685 781 335

Daily average number of trades )thousand( 54 70 22

Number of trading days 241 243 239

Number of issued trading codes 151,540 229,438 173,131

Total index Fiscal Year 20 Mar. 2015



End of year 62,532 79,015 38,041

Highest 79,014 89,501 38,739

Lowest 61,533 38,603 23,787

Volume )Million Shares(

Value )IRR Billion(

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0

146,774

55,315

Apr-13

Jun-13

Aug-13

Oct-13

Dec-13

Feb-14

Apr-14

Jun-14

Aug-14

Oct-14

Dec-14

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Time line

18 May 2014 – Saba Nour Steel Raw Materials Supply-ing Company was transferred from Iran Farabourse )IFB( to Tehran Stock Exchange )TSE(, and its equities started trading at IRR 14,620 per share.

26 May 2014 – 10 percent of Sepahan Oil Company’s shares, as equivalent to 105 million equities were of-fered at TSE after being listed at IRR 17,500 per share.

3 June 2014 – TSE’s Listed Companies Affairs calculated corporate governance index for the first time at the Ex-change after finalizing its rating methods.

14 June 2014 – Jey Oil Refinement Company and Mo’in Mellat Investment Company were listed at TSE.

16 June 2014 – Tehran Stock Exchange held its AGM for the fiscal year ended 20 March 2014. The new members of the board were elected, TSE’s capital increase from IRR 450 billion to IRR 900 billion from prudential re-serve and retained earnings was ratified and the share-holders accepted to receive IRR 110 DPS.

25 June 2014 – Shomal Shargh Housing Investment Company was transferred from IFB and its shares were traded for the first time at TSE at IRR 2,179 per share.

3 July 2014 – TSE started its shareholders dividend pay-ments for the fiscal year ended 20 March 2014.

16 September 2014 – South Kish Kaveh Steel Company shares were admitted at TSE, and the company’s Ijarah sukuk was listed on 17 September 2014. The sukuk’s secondary market trading started on 19 October 2014.

1 November 2014 – Ghadir Capital and Industry De-velopment Company was admitted at Tehran Stock Exchange.

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Time line

16 November 2014 – 400 million as equivalent to ten percent of Cement Industries Investment and Devel-opment Company’s equity shares were offered at IRR 1,500 per share in TSE.

17 November 2014 – Second cement industry round-table was held at the Exchange in order to review the latest status, to tackle the existing challenges and to improve the industry’s business environment.

18 November 2014 – Shiraz municipality offered 116,000 bonds through book building at IRR 960,000 each for trading at TSE.

27 January 2015 – Firouzeh )Turquoise( 30 largest-com-pany-index fund, TSE’s first index-based ETF was under-written as amounted IRR 500 billion.

1 February 2015 – Mobin Petrochemical Company was admitted at TSE.

10 February 2015 – Brokerage firms were provided with group on-line trading access in order to monitor their branches and clients activities more efficiently and ex-actly.

16 February 2015 – Kardan index ETF units were under-written at Tehran Stock Exchange.

20 February 2015 – In order to increase market liquid-ity, TSE declined its listed companies’ base volume to stay at 4/10,000 of total share numbers. The highest base volume was set at IRR 10 billion and the lowest at IRR 500 million.

23 February 2015 – Kavian Steel Company was trans-ferred from TSE to IFB due to Listing Committee resolu-tion on 8 October 2014.

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Three new indices were launched at TSE, including Price Index, Price Index )equal weighted( and Price and Dividend Index )equal weighted(.

8 March 2015 – Isfahan Petrochemical Company was transferred from TSE to IFB due to Listing Committee resolution on 3 September 2015.

15 March 2015 – Ma Insurance Company was listed at TSE.

16 March 2015 – More than 2 million equity shares as equivalent to IRR 4,387 million of Middle East Bank were transferred from IFB to TSE and traded for the first time at IRR 1,876 per share.

18 March 2015 – About 617,000 equity shares of Ka-vir Tire Company were transferred from IFB to TSE and traded at IRR 14,400 per share.

Foreign Investors Visit to TSE

During the fiscal year, 175 foreign delegates in 36 groups from policy-makers, regulators, Exchanges and investment societies visited TSE, including delegations from IMF and some embassies in Iran.

TSE participated in the first Islamic Investment Confer-ence of Iran, Invest Exhibition in Stuttgart, Germany and Iran’s capital market roadshow in London during the fiscal year ended 20 March 2015.

Other events

Time line

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Past year was an important period for Tehran Stock Exchange and the investors of this market. Due to the particular economic situation and the uncertainties of international policies, TSE lost 27 percent of its market capitalization to reach IRR 2,813 trillion. The Exchange’s trading value and main index both declined 43 and 21 percent, respectively. However, some positive news came about.Despite the dominant economic stagnation in the country, corporate financing through TSE developed. The nominal value of the market increased more than 31 percent to IRR 954 trillion. Major part of that movement was due to the listed companies’ capital increase. During the year, the listed companies’ capital was raised to above IRR 213 trillion, up 34 percent comparing one year earlier. Of the total amount, IRR 105 trillion funded by receivables and cash contributions, which is 44 percent growth as compared to the last year.In the period, bonds, CDs and sukuks were among the products applied for corporate financing with more than IRR 3,700 billion fund raising for the issuers.Price index re-calculation and re-issuance was a general request of Iran’s capital market participants, which was accomplished last year. Equal weighted indices )price and dividend( were introduced to increase market transparency.Among TSE’s listed financial products and entities, there were 2 ETFs and 29 embedded securities. 6 new com-panies were also listed at the Exchange. Moreover, above 170,000 person-hours technical and public training courses were held for the issuers, members and investors. 6 seminars, 4 books and 6 technical brochures and several industry roundtables were among other activities at TSE in the last year.Research projects were carried out on securities market micro-structures, proposals to lower base volume, methods to improve free-floats, launching portfolio futures and introducing option contracts. The new build-ing construction project of TSE is also under process.Tehran Stock Exchange is making all its efforts in order to have a role in Iran’s economic growth and prosperity.

Message from board of directors

TSE Board of Directors 2014

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1-1 HistoryTehran Stock Exchange )Public Company( was established on November 2006 based on the new market act rat-ified by the Parliament in 2005. Based on this development, the existing Exchange, which had been launched in 1960s, was demutualized.

1-2 Activities according to the articles of association• Organizing and managing the securities exchange in order to make trades by local and foreign investors according to the regulations• Listing securities of local or international issuers • Setting membership standards for applicants, ratifying and implementing disciplinary principles on and be-tween members, regulating their responsibilities and monitoring their activities• Providing the required infrastructure for the members’ fair access to trading• Cooperating and coordinating with other financial entities, responsible for parts of the related securities trad-ing, issuing or data processing activities, namely Central Securities Depository of Iran )CSDI(, as well as carrying out research activities and training jobs and culture development in order to facilitate and develop securities trading and investment culture• Working with other Exchanges in Iran or overseas for exchanging information and expertise, harmonizing the regulations and standards and cross-listing of the securities• Listing securities trading surveillance• Compiling, processing and disseminating the ordering and trading information• Observing securities issuers’ activities

1-3 TSE’s shareholdersTSE’s shareholders and ownership level are mentioned in table 01. Based on the market act, no shareholder can hold more than 2.5 percent of the Exchange’s own shares. The articles of association maintain that the shareholders include brokerage firms, financial institutes and retailers. The ownership levels should be always maintained.

1- Introduction to TSE and financial performance

Table 01 – Shareholders breakdown composition, fiscal year ending 20 March 2015

Shareholders No. of shareholders No. of shares Percent of ownership

Brokerage firms 76 305,701,992 34

Financial institutes 78 353,555,992 39.2

Retailers 5,888 240,742,016 26.8

Total 6,024 900,000,000 100

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Table 02 – Major shareholders based on groups’ breakdown

1-4 Major shareholdersTable 02 includes the list of TSE’s major shareholders at the end of fiscal year ending 20 March 2015.

No. Shareholder No. of shares Percent of ownership

Brokerage firms 305,701,992 33.96

1 Keshavarzi bank brokerage firm 22,500,000 2.5

2 Mofid brokerage firm 22,500,000 2.5

3 Iran Insurance brokerage firm 20,289,600 2.25

4 Razavi brokerage firm 20,289,600 2.25

5 Agah brokerage firm 18,000,000 2.0

6 Refah bank brokerage firm 18,000,000 2.0

7 Tejarat bank brokerage firm 18,000,000 2.0

8 Mellat bank brokerage firm 18,000,000 2.0

9 Hafez brokerage firm 15,869,996 1.76

10 Tose’e Farda brokerage firm 13,620,000 1.51

11 Pasargad bank brokerage firm 13,620,000 1.51

12 Maskan bank brokerage firm 13,620,000 1.51

13 Other brokerage firms 91,392,796 10.18

Financial institutes 353,555,992 39.26

14 Parsian Bank 22,500,000 2.5

15 National development investment company 22,500,000 2.5

16 Ghadir investment company 22,500,000 2.5

17 Omid investment management company 22,500,000 2.5

18 Saba ta’min investment company 22,500,000 2.5

19 Oil industry pension fund investment company 19,800,000 2.2

20 Bahman investment company 18,360,000 2.04

21 Tadbir investment company 18,000,000 2.0

22 Alborz insurance company 17,940,000 1.99

23 Andishe mehvaran investment company 13,500,000 1.5

24 Industry and mine investment company 13,500,000 1.5

25 Iran national investment company 13,500,000 1.5

26 Other financial institutes 455,996,126 14.02

Others (retailers) 240,742,016 26.78

Total 900,000,000 100

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1-5 Capital increase

TSE’s capital has changed since establishment as indicated below.

Table 03 – Capital changes (IRR billion)

Fiscal year ending

Capital increase registration date

Previous capital

Increase New capital Increase % Source of increase

20 March 2009

- 150 - 150 - -

20 March 2010

21 November 2010

150 105 255 70 Prudential reserves and retained earning

20 March 2011

7 December 2011 255 45 300 17.6 Prudential reserves and retained earning

20 March 2014

14 October 2013 300 150 450 50 Prudential reserves and retained earning

20 March 2015

22 October 2014 450 450 900 100 Prudential reserves and retained earning

1-6 TSE’s own shares trading

Due to the GA’s approval for self-listing of TSE’s shares and providing trading mechanism for its shareholders, required arrangements were made on 4 September 2011 for TSE’s shares being listed in Iran Farabourse )IFB(. The shares’ trading started on the mentioned date at IFB through negotiated transactions. The following table shows TSE’s shares trading in the last two fiscal years.

Table 04 – TSE’s shares trading

Shareholder Fiscal year ending 20 March 2015 Fiscal year ending 20 March 2014

Total trading volume

Total trading value )IRR(

Average price per

share )IRR(

Total trading volume

Total trading value )IRR(

Average price per

share )IRR(

Brokerage firm

51,500 461,300,000 8,957 - - -

Financial institutes

22,515,000 3,956,250,000 176 75,002 400,012,429 5,720

Others 27,989,438 183,078,912,333 6,541 556,600 2,388,050,000 4,290

1-7 Legal environment

The major governing regulations at Tehran Stock Exchange include Commercial Code, The Law for Develop-ment of New Financial Instruments and Institutions, Tehran Stock Exchange’s Trading Bylaw, Trading Executive Directive, as well as the brokerage firms’ executive bylaws and issuers’ disciplinary directive. The anti-money laundering rule is also among the related regulations.

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Table 05 – Financial activities’ market

Table 06 – the forecasted information on TSE’s EPS and real operations

1-8 Financial Performance

A summary of Tehran Stock Exchange’s financial activities during the fiscal year ended 20 March 2015 is given in the following table:

Description Fiscal year ended 20 March 2014 (IRR billion)

Fiscal year ended 20 March 2013 (IRR billion)

% Change

Income from services 514 684 )52(

Cost of services )181( )341( 26

General and administra-tive expenses

)91( )78( 17

Income from investment 12 14 )14(

Net other incomes 147 111 32

EBIT 389 574 )32(

Net profit 327 458 )29(

EPS )IRR( 364 509 )28(

Current ratio % 357 299 0.19

Total debt ratio % 13.35 22.53 )40.7(

Return on assets % 22.6 37.3 )39.4(

Return on equity % 25.6 45.7 )20.1(

1-9 Earning per share forecast

The forecasted TSE’s EPS for the fiscal year ending 19 March 2016, as well as the comparative information of the fiscal year ended 20 March 2015 are included in the table 06.

Description FY ending 19 Mar. 2016 budget (IRR million)

FY ended 20 Mar. 2015 budget (IRR million)

FY ended 20 Mar. 2014 operations (IRR million)

Income from services 820,245 757,920 513,750

Cost of services )261,601( )173,540( )181,027(

Gross income 603,644 584,380 332,723

General and administra-tive expenses

)112,820( )91,292( )90,907(

Operating profit 490,824 493,088 241,816

Net other non-operating income and expenses

51,230 74,644 147,413

EBIT 524,054 567,732 389,229

Tax )125,231( )124,912( )61,846(

Net profit 148,614 442,820 383,723

EPS )IRR( 463 492 364

Operating EPS )IRR( 406 409 203

Non-operating EPS )IRR( 57 83 161

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2- Market operations overview

2-1 Outline

The general performance at Tehran Stock Exchange in the fiscal year ended 20 March 2015 is provided in ta-ble 07. During this period, total trading turnover of the Exchange shrank 44 percent to reach IRR 542 trillion, while the main index lost 21 percent and closed at 62,532. The average daily trading value, as well as retail and bloc trading value respectively contracted 43 and 46 percent. The number of listed companies reached 314 in the year when TSE had 2 IPOs )Sepahan Oil and Cement Industries Development Investment companies(, 4 transferred listings from IFB )Saba Nour Steel, Shomal-e-shargh Housing Investment, Kavir Tire and Middle East Bank(, and also 9 de-listings. Number of trades reduced to 13 million times, comparing 17 million times one year earlier, indicating 25 percent decrease. The market capitalization was also lost about 27 percent in the fiscal year ended 20 March 2015 to reach IRR 2,813 trillion. )Table 07(Moreover, 36 percent dropping of new trading codes in the past year was an indication for less investment interests to the stock exchange.On-line trading turnover was IRR 304,731 billion in the fiscal year ended 20 March 2014 that was diminished in the past fiscal year for about 34 percent to stay at I RR 201,082 billion. However, the trading volume escalated about 9 percent from 77,151 million shares.

Table 07 – Securities market activities indicators

Indicators Unit FY ended 20 March 2015

FY ended 20 March 2014

% Change

Main index )TEDPIX( - 62,532 79,015 )21(

Market capitalization IRR billion 2,813,156 3,865,970 )27(

Trading volume Million shares 165,184 189,689 )13(

Trading value )total( IRR billion 542,522 964,198 )44(

Normal trading value )retail & block( IRR billion 377,119 701,846 )46(

State-owned offering value IRR billion 9,613 104,087 )91(

State-owned offering volume Million shares 2,420 8,266 )71(

Average daily trading value )total( IRR billion 2,251 3,968 )43(

Average daily normal trading value IRR billion 1,565 2,888 )46(

Average P/E ratio - 5.4 7.1 )11(

On-line/total trading volume Million shares 84,312 77,151 9

On-line/total trading value IRR billion 201,082 304,731 )34(

No. of listed companies No. 314 317 )1(

No. of trades Million times 13 17 )25(

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2-2 Equities market indices

During the past fiscal year, TSE’s broad index declined from 79,015 to 62,532 from the start to the end; this was 21 percent loss on the index. Other indices of the Exchange ALSO reduced in the period as an indicator of shrinking in all market’s sectors. The free-float index was 90,978 at the end of the fiscal year ended 20 March 2014, and contracted 21 percent to 72,210 one year later.

Table 08 – Main indices of Tehran Stock Exchange

Index FY ended 20 March 2015


Change % Change

Broad )TEDPIX( 62,532 79,015 )16,483( )21(

Free-float 72,210 90,978 )18,768( )21(

First market 45,317 58,607 )13,290( )23(

Second market 127,841 152,442 )24,601( )16(

Financial 135,089 157,628 )22,539( )14(

Industrial 51,296 65,837 )14,541( )22(

TSE 50 blue-chip 2,576 3,336 )760( )23(

TSE largest 30 )22 Aug. 2010(=1,000 2,877 3,760 )883( )23(

Chart 01 – TSE’s broad index trend

3-2 Market CapitalizationTehran Stock Exchange’s market capitalization declined 27 percent in the fiscal year ended 20 March 2015 and reached IRR 2,813 trillion.

100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

Apr-13

Jun-13

Aug-13

Oct-13

Dec-13

Feb-14

Apr-14

Jun-14

Aug-14

Oct-14

Dec-14

Broad Index

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Table 09 – Top 10 sectors by market capitalization (FY ended 20 March 2015)

Sector No. of companies Market cap (IRR billion) %

Chemical 27 628,601 22

Banks, credit institutes 11 376,018 13

Base metals 19 276,735 10

Petroleum products 4 247,737 6

Diversified holdings 2 241,543 9

Telecommunication 9 177,632 9

Metal ores mining 7 164,102 6

Pharmaceutical 31 108,171 3

Cement, lime and plaster 27 84,613 3

Auto manufacturing 30 74,072 4

Others 147 433,931 15

Total 314 2,813,156 100

Chart 02 – TSE’s market capitalization, monthly trend (IRR billion)

6000000

5500000

5000000

4500000

4000000

3500000

3000000

2500000

2000000

1500000

1000000

500000

0

Apr-13

Jun-13

Aug-13

Oct-13

Dec-13

Feb-14

Apr-14

Jun-14

Aug-14

Oct-14

Dec-14

Market Capitalization (IRR Billion)

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Table 10 – Equities and rights trading

Chart 03 – Market c apitalization by sectors (FY ended 20 March 2015) (%)

4-2 Securities trading

Total equities and rights trading value at the Exchange in the past fiscal year 241) trading days( equaled IRR 522,542 billion, 44 percent lower than one year earlier. About 69 percent of the value )IRR 377,119 billion( was related to the normal trading )retail and bloc( with 46 percent decrease than the year before. During the fiscal year ended 20 March 2015, daily average trading value lessened from IRR 4,015 billion to IRR 2,251 billion.

Number of trades shrank about 25 percent to reach 13 million times. First market’s equities and rights value, volume and number of trading was respectively 58, 69 and 56 percent of total figures in the market.

Trading FY ended 20 March 2015 FY ended 20 March 2014 % Percent

No. )million shares(

Value )IRR billion(

No. )million shares(

Value )IRR billion(

Number Value

Normal )retail and bloc( 144,646 377,119 164,433 701,846 )12( )46(

Wholesale and others 20,539 165,403 25,256 262,352 )19( )37(

Total (equities and rights) 165,184 542,522 189,689 964,198 (13) (44)

Futures 0.000172 10 0.000094 3 - 233

Bonds 16 15,676 11 10,747 45 46

Embedded put option 166 12 14 0.81 1,086 -

ETFs 133 1,133 81 770 64 47

Total 165,499 559,353 189,795 975,715 1,182 283

Chemical

Banks

Base metals

Petroleum

Diversified holdings

Telecommunication

Metal Ores

Pharmaceutical

Cement

Auto manufacturing

Others

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Table 11 – Equities and rights retail and bloc trading

Table 12 – Equities and rights value, volume and number of trading

Table 13 – Equities and rights daily average trading (FY ended 20 March 2015)

Items FY ended 20 March 2015


% Change

Trading value )IRR billion( 542,522 964,198 )44(

First market )IRR billion( 313,008 528,334 )41(

Second market )IRR billion( 229,514 435,864 )47(

Number of shares and rights )million( 165,184 189,689 )13(

First market )million shares( 114,163 119,126 )4(

Second market )million shares( 51,021 70,563 )28(

Number of trades )million( 13 17 )25(

First market )million times( 7 10 )30(

Second market )million shares( 6 7 )14(

Fiscal year Volume (million shares)

Value

(IRR billion)

Number of trades (mil-

lions)

No. of trading

days

Daily average

Vol. )Mil. shares(

Value )IRR Bil.(

No. of trades

Ended 20 March 2013

80,156 257,072 5 239 335 1,076 21,904

Ended 20 March 2014

189,689 964,198 17 243 781 3,968 70,474


165,184 542,522 13 241 685 2,251 53,595

Period Trading days Daily average trad-ing value

(IRR billion)

Daily average trad-ing volume

(million shares)

Daily average num-ber of trades

21 Mar – 20 Apr 17 1,637 435 50,997

21 Apr – 21 May 22 6,672 914 70,968

22 May – 21 Jun 19 3,310 743 58,454

22 Jun – 22 Jul 22 1,429 522 43,962

23 Jul – 22 Aug 19 1,647 596 45,535

23 Aug – 22 Sep 23 1,301 463 41,343

23 Sep – 22 Oct 20 1,378 604 52,058

23 Oct – 21 Nov 18 2,518 977 86,108

22 Nov – 21 Dec 20 2,095 828 66,716

22 Dec – 20 Jan 21 1,461 615 42,143

21 Jan – 19 Feb 20 1,145 592 47,573

20 Feb – 20 Mar 20 2,201 957 41,620

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Table 14 – IPOs (FY ended 20 March 2015)

5-2 Initial public offerings (IPOs)

In the financial year ended 20 March 2015, the listing committee held 12 sessions and ratified admitting of 8 applied companies, some were listed during the past year and the rest are under process of listing. The follow-ing tables 14 – 17 indicate the latest status of the new companies listing, IPOs information, as well as bonds and ETFs listings value, equal to IRR 3,700 billion and IRR 1,500 billion respectively.

No. Company Date of admission

Date of listing

Date of offering

Capital (IRR billion)

Notes

At listing Last capital

1 Sepahan Oil 7 Jul 2013 6 Jan 2014

26 May 2014

1,050 1,050

2 SabaNour Steel 16 Mar 2014 5 May 2014

18 May 2014

1,036 2,036

3 Jey Oil 15 Dec 2013 14 Jun 2014

- 290 290 Annulled by the major

shareholder

4 Mo’in Mellat 5 Jan 2014 14 Jun 2014

- 1,000 3,000 Listing and offering peri-od extended

5 Ghadir Capital & In-dustry Development

4 May 2014 1 Nov 2014

- 2,900 33,350

6 Cement Industries Investment & Devel-opment

28 Jul 2013 26 Jan 2014

16 Nov 2014

4,000 4,000

7 Khuzestan Cement 15 Dec 2013 19 Mar 2014

- 14,250 650 Once ex-tension and

offering

8 Shomal Shargh Housing Investment

16 Mar 2014 5 May 2014

25 Jun 2014

1,000 600

9 South Kish Kaveh Steel

16 Mar 2014 16 Sep 2014

- 4,000 6,000 Listing and offering peri-od extension 16 Sep 2015

10 Mobin Petrochemical 3 Aug 2014 1 Feb 2015

- 200 14,250

11 Ma Insurance 19 Nov 2014

5 Mar 2015

- 1,000 1,000

12 Middle East Bank 26 Oct 2014 1 Mar 2015

16 Mar 2015

4,000 4,000

13 Kavir Tire 23 Feb 2014 1 Mar 2015

17 Mar 2015

200 200

14 Fajr Petrochemical 23 Feb 2014 - - 1,000 1,000

15 Jam Petrochemical 23 Feb 2014 - - 4,800 9,600

16 Saveh Cement 23 Feb 2014 - - 650 650

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Table 15 – Newly listed companies trading value

Table 16 – Debt securities listing

Table 17 – Exchange Traded Funds (ETFs)

No. Company IPO day trading Normal trading from IPO day till 20 Mar 2015

Million shares

IRR billion % of cap-ital

Million shares

IRR billion

% of capital

1 Saba Nour 3.4 50 - 23 194 165

2 Sepahan Oil 90 1,574 8.5 1,227 6,586 195

3 Shomal Shargh Housing Invest-ment

2.5 5 - 560 1,120 170

4 Cement Industries Investment & Development

400 600 10 1,330 2,108 74

5 Middle East Bank 2 4 - 4 8 3

6 Kavir Tire 0.6 9 - 0.6 9 1

Total 498.5 2,242 - 3,145 10,025 -

Name Type of security Listing date Offering date Maturity date Value (IRR billion)

Rayan Saipa Leasing

Certificate of Deposit

7 Sep 2014 16 Sep 2014 14 Mar 2017 500

Kaveh Jonoub Steel

Sukuk 20 Sep 2014 22 Sep 2014 22 Sep 2018 2,000

Shiraz Munici-pality

Certificate of Cooperation

28 Oct 2014 18 Nov 2014 8 Nov 2017 1,200

Total 3,700

Name Type of fund Manager No. of units (mil)

Units nominal value (IRR)

Total (IRR bil-lion)

Firouzeh Asia Firouzeh Asia Brokerage Firm

50 10,000 500

Kardan Stock invest-ment

Kardan Invest-ment Bank

100 10,000 1,000

Sepaas 1,500

6-2 Listed companies classification changes

Based on article 54 of listing directives, TSE is in charge of classifying the listed companies on the basis of its first and second markets’ standards around May each year. In the past fiscal year ended 20 March 2015 totally 314 companies were listed in 37 sectors at TSE. The de-listed companies are transferred to IFB to continue their trading in the capital market. Table 18 points out )de(listings of the past three years.

23

Table 18 – New listings and de-listings

Table 19 – Capital increase in TSE’s listed companies

7-2 TSE listed companies financingNumber of the listed companies with capital increase in the fiscal year ended 20 March 2015 was 110 and the total value amounted IRR 158,861 billion. Table 19 demonstrates more details about their capital increase.

Fiscal Year

# Co.at year’s begin-

ning

No. of listed and offered companies

No. of de-listed companies No. of Co. at year’s

endEnded

20 Mar 2015

317 6 Saba Nour Steel, Sepahan Oil, Shomal Shargh Housing Invest-ment, Cement Industries Develop-ment Investment, Kavir Tire, Middle East Bank

9 Firouza Engineering, Toulipers, Rangin Industrial and Chemical, Tousi Wool Knitting, Iran gypsum, Sadid Industrial Group, Kaf, Isfahan Petrochemical ,Kavian Steel

314

Ended

20 Mar 2014

322 7 Ta’min Oil & Gas, Mobile Telecom, Banks Investment & Pension Fund, Iranian Leasing, Ta’min Pharmaceu-tical Investment, Pakshou, Khalij Fars Petrochemical industries

12 Doroud Farsit, Ahvaz Farsit, Azarit, Tak Cable, Mashhad Packaging, Pars Sugar, Bakhtar Cable, Permit, Jaam e Jahan Nama, Kerman Ferromolyb-denum

317

Ended

20 Mar 2013

343 3 Kharazmi Investmnent, Mellat insurance, Bandar Abbas Refinery

24 Italran, Pars Home Appliances, Zan-gan Power Supply, Sadra, Azmayesh Industries, Telecom Manufacturing, Payam Industries Development, Iran Cable Manufacturing, Mashhad Carton, Sadid Pipes and Installations, Torbat e Jaam Food and Sugar, Key-van, Ghazvin Glass, Iran Packaging Industries, Plastiran, Abgineh Manu-facturing and Industrial, Shahin Plas-tic Manufacturing, Naab Vegetable Oils, Henkel Pakvash, Pars Packaging, Azarit, Ahvaz Farsit, Doroud Farsit

322

Fiscal year Resources for capital increase (IRR billion) Capital in-crease (IRR

billion)Receivables and cash contributions Retained earnings and excess of

reassessed assets

Ended 20 March 2015

73,276 85,585 156,861

Ended 20 March 2014

73,225 85,424 158,649

Ended 20 March 2013

31,979 25,538 57,517

8-2 Member brokerage firms

At the end of the past fiscal year, 101 brokerage firms provided their services through 1,414 trading stations to clients. Among the members, 97 firms were based in Tehran and 4 others out of the capital city. 93 brokerage firms were authorized to provide on-line trading access, 41 were listing consultants and 42 firms were offering services. Moreover, 38 firms have portfolio management services, as well as 50 brokerage companies manag-ing mutual funds.

24

Table 20 – TSE’s brokerage firms

Table 21 – Activity and trading authorization

In the past fiscal year, total new trading stations license, minus the number of license termination of the exist-ing stations, amounted to 223 units, as mentioned in the table below.

Brokerage firms and stations FY ended 20 Mar 2015

FY ended 20 Mar 2014

Brokerage firms 101 94

Trading stations at TSE’s trading floor 98 93

Trading stations at brokerage firms’ Tehran offices 576 487

Trading stations at brokerage firms’ provincial regional offices 460 350

Trading stations in regional floors 251 239

Trading stations of mutual funds 29 22

Total trading stations 1,414 1,191

Description FY ended 20 Mar 2015


License FY ended 20 Mar 2015


Floor launching 53 56 Trading station launching

241 228

Office launching 69 68 License termination )13( )9(

Local representa-tive launching

61 18 Issued )terminated( licenses

)5( -

Total 183 142 Total 223 219

9-2 Regional trading floors

Among the major activities of the regional trading floors are: facilitating access to the trading engine, improv-ing investment culture and providing training through courses and workshops, as well as producing media programs and developing brokerage networks and any other related market operations.

Tehran Stock Exchange has regional floors in 21 provinces around the country, and in other parts the broker-age firms’ offices provide investment services through their exclusive floors. During the fiscal year ended 20 March 2015 total amount of IRR 226,702 billion, 21 percent of total trading value )buy and sell( were executed out of the capital Tehran. Details of trading value in each trading floor are as mentioned in the following table.

25

Table 22 – TSE and brokerage firms regional trading statistics

Exchange’s trading/regional floor Brokerage firms floors/offices





No Region Trading value (IRR

billion)

% of total

Trading value (IRR

billion)

% of total

No Region Trading value (IRR

billion)

% of total

Trading value (IRR

billion)

% of total

1 Kish 111,980 51.07 118,483 32.32 1 Arak 1,253 16.90 3,453 18.81

2 Isfahan 19,398 8.85 48,122 13.03 2 Ahwaz 1,077 14.53 2,803 15.27

3 Mashhad 14,195 6.47 34,915 9.52 3 Sanandaj 929 12.53 994 5.41

4 Karaj 11,454 5.22 24,357 6.64 4 Amol 831 11.21 1,893 10.31

5 Tabriz 8,190 3.73 19,596 5.35 5 Babol 499 6.73 1,468 7.99

6 Rasht 8,056 3.67 11,547 3.15 6 Neisha-bour

499 6.73 1,248 6.80

7 Zanjan 7,155 3.26 12,837 3.50 7 Gorgan 448 6.04 1,719 9.36

8 Shiraz 5,854 2.67 12,518 3.41 8 Kashan 413 5.57 1,269 6.91

9 Yazd 5,222 2.38 12,324 3.36 9 Shahroud 247 3.33 768 4.18

10 Ardebil 4,163 1.90 7,318 2 10 Bojnourd 202 2.72 402 2.19

11 Kerman 4,097 1.87 12,988 3.54 11 Doroud 188 2.54 532 2.90

12 Qom 3,425 1.56 6,725 1.83 12 Rafsanjan 178 2.40 292 1.59

13 Kerman-shah

3,153 1.44 6,925 1.89 13 Shahr e kord

136 1.83 232 1.26

14 Ghazvin 2,763 1.26 7,271 1.98 14 Nour 107 1.44 345 1.88

15 Hamedan 2,727 1.24 9,515 2.60 15 Boushehr 96 1.29 158 0.86

16 Sari 2,071 0.94 6,717 1.83 16 Khoram abad

93 1.25 322 1.75

17 Uremia 1,916 0.87 5,098 1.39 17 Boroujerd 88 1.19 385 2.10

18 Bandar Abbas

1,893 0.86 3,854 1.05 18 Babolsar 54 0.73 0 0

19 Semnan 1,137 0.52 3,757 1.02 19 Sabzevar 51 0.69 0 0

20 Birjand 255 0.12 1,255 0.34 20 Gonbad 25 0.34 79 0.43

21 Zahedan 184 0.08 493 0.13

Total 219,288 100 701,615 100 7,414 100 18,362 100

Chart 04 –Regional trading floors

120,000

100,000

80,000

60,000

40,000

20,000

0

2014 )IRR Billion(

2013 )IRR Billion(

Kish

Isfa

han

Mas

had

Kara

j

Tabr

iz

Kerm

an

Zanj

an

Shira

z

Yazd

Rash

t

Ham

edan

Ard

ebil

Qaz

vin

Kerm

ansh

ah

Qom Sa

ri

Uru

mie

h

Band

ar A

bbas

Sem

nan

Ahv

az

Birja

nd

Zahe

dan

26

3 – Corporate Governance

3-1 Board of directors

The efficient CG trends are necessary for well performing of capital market and overall economy in order to maintain and raise public confidence. Weak CG may deteriorate market’s confidence, which in its turn leads to outflow of resources, liquidity crisis and price crash in the Exchanges. As a matter of fact, corporates should be accountable not only to their shareholders, but also their investors and other members. Tehran Stock Exchange attempts to observe the highest ethics, punctual and transparent disclosure, as well as observing all rules, reg-ulations and directives through the Exchange’s CG directives implementation. This has made a set of inquiries, by which the board of directors and its committees to comply their activities with the requirements.

The elected members of the board in the last FY held 25 sessions in order to rule efficient governance on the Exchange’s affairs in line with shareholders benefits and other stakeholders’ balanced profits. The board applies three technical and two subordinate committees for efficiency of its duties.

Table 23 – Tehran Stock Exchange’s board of directors

Board Member Representative Position Education

Mellat Financial Group Mohammad Ebrahim Mohammad Pourzarandi

Chairman Industrial management, PhD.

Mofid Securities Co. Aliyar Salehi Vice chairman Industrial engineering, B.S.

Bank Tejarat Brokerage Firm

Seyed Mojtaba Fahim Hashemi Non-executive board member

Accounting, B.S.

Bahman Investment Co. Ali Rostami Non-executive board member

Commercial management, PhD.

Saba Ta’min Investment Co.

Mohammad Reza Rostami Non-executive board member

Financial management, PhD.

Pasargad Arzesh-afarinan Group

Ali Akbar Amin Tafreshi Non-executive board member

Financial management, M.S.

Tadbir Investment Co. Mojtaba Taghipour Non-executive board member

Financial management, M.S.

Securities and Exchange Organization

Hassan Amiri SEO supervisor Financial management, PhD.

Hassan Ghalibaf Asl CEO Financial management, PhD.

Hassan Ghalibaf Asl TSE CEO

Mohammad Ebrahim Mohammad Pourzarandi

Chairman

Seyed Mojtaba Fahim Hashemi

Non-executive board member

Aliyar SalehiVice chairman

27

3-1-1 Auditing committee

The committee is in charge of monitoring internal and independent external auditors, proposing independent auditors to the board of directors, as well as the shareholders in order to appoint auditors, determine their fee levels and dismiss them, reviewing or ratifying their activities, receive auditing reports and adopt the revisions. The auditing committee includes 6 members, at least 3 of them among the non-executive board members and the rest are appointed out of the Exchange by the board of directors.

3-1-2 Risk management and strategic committee

The risk committee and strategic subsidiary commission are in charge of monitoring management activities in strategic policies and market risk control, as well as liquidity, operational, reputational and other risks.

Risk management committee is an integral part of the Exchange’s risk control mechanism. The committee aims to help the management team to reach targets matched with the strategic plan. The members report all sub-jects they believe are related with governance, rule of law and risk management duties to the board of direc-tors. The committee consists of 3 members, including a member of the board, one of the executive directors, appointed by the CEO and an accredited expert qualified by the board of directors.

3-1-3 Compensation committee

An overall oversight of the payments to the staff, and ensuring that compensations are consistent with organi-zational culture, goals, strategy and surveillance environment as described in the Exchange’s vision are among this committee’s responsibilities. There are 5 members in compensation committee, including the non-exec-utive board member, the CEO, and logistics vice president or HR chief expert. 3 non-executive member of the committee are appointed by the CEO.

3-1-4 Rules and regulations committee

The board of directors has formed this committee in order to execute its own responsibilities more effectively. The rules and regulations committee is in charge of monitoring the executive procedures, as well as decision making on new trading offices authorization, members and issuers disciplinary infringing verdicts, etc. The committee reports the results of its reviews to the board members. There are 4 members in the committee, including 3 non-executive board members, as well as the CEO.

3-1-5 Construction committee

Tehran Stock Exchange’s new building construction project was started over a land as large as 2,621 sqm. in Sa’adat Abad region since 2010, Tehran. The committee acts to direct, apply proper policies and monitor the construction stages in this project. 3 board members, as well as the CEO, logistics vice president and 2 indepen-dent experts are the committee members with the project executor contractor as the committee’s secretary.

Ali RostamiNon-executive board member

Mohammad Reza Rostami

Non-executive board member

Ali Akbar Amin TafreshiNon-executive board member

Mojtaba TaghipourNon-executive board member

Hassan AmiriSEO supervisor

28

Table 24 – New building floors and space application

Floors Application Area sqm.

-6 Data center 2,579

-5 to -2 Parking 10,076

-1 Commercial use, training and assembly salons 2,217

GF Lobby, trading floor 1,606

Mezzanine Commercial use, investors assembly 1,362

+1 to +10 Administrative use 15,928

Total area 33,768

TSE’

s N

ew B

uild

ing

29

3-1-6 Board of directors’ secretariat

Based on article 34 of the Exchange’s statutes, the board of directors has a secretariat which operates under the chairman. This is in charge of arranging board meetings, documentation, as well as minutes preparation. The secretariat is the official reference for disseminating the board’s decisions and the source for any enquiry from the board.

3-2 Human force

The table below depicts the human capital TSE enjoys in its current and development plans on 20 March 2015.

Table 26 – Human force on 20 March 2015

Education Staff % of total

Tehran Regional floors Total

PhD. 3 4 7 3

Master’s 73 23 96 36

Bachelor’s 49 43 92 34

Associate’s 7 7 14 5

General Diploma and below 34 24 58 22

Total 166 101 267 100

TSE Staff

30

3-3 Organizational chart

Tehran Stock Exchange’s organizational chart is shown below. The board’s appointed CEO is in charge of the executive affairs. The other executive directors operate under the CEO’s supervision. There are four deputies, as well as the CEO’s department.

3-4 Independent auditor and legal inspector

Bayat Rayan Auditing Institute is the independent auditor and legal inspector of Tehran Stock Exchange and Rahyaft Auditing Institute is the alternate one. The auditing committee of the Exchange sets remuneration and proposes the auditor to the general assembly.

FinanceDept.

IssuersDept.

Research &Development Dept.

ListingDept.

OrganizationalExcellence Dept.

MembersDept.

InvestmentDevelopment Dept.

AdminiStrationDept.

Information technology & Systems Dept.

OperationsDept.

Data InformationDept.

Market SruveilanceDept.

GeneralAssembly

Advisors

Board of Directors Secretarial

Legal & ContactAffairs Dept

Public Relations & International Dept

CompensationCommitiee

AudingCommitiee

CEO Office

Strategic & Risk Management

Commitiee

InternalAuding

PhysicalSecurity

Advisors

Board ofDirectors

CEO

LogisticsDeputy

MarketDeputy

DevelopmentDeputy

Issuers &Members Deputy

31

TSE’

s N

ew B

uild

ing

32

Departments Development plans Current programs

Issuers and members • Preparing a comprehensive report on cement and auto manufacturing industries

• Establishing mutual funds secre-tariat and frequent joint meetings with funds managers

• Revising securities listing directive

• Holding cement industry’s round-table

• 10 companies admission process was completed, 4 companies were listed and the remaining was pend-ing due to market’s conditions for the coming year. 3 ETFs, one Ijarah sukuk, a CD and one municipality bond.

• 9 companies were determined as disqualified for continued listing and were transferred to the junior exchange, Iran Farabourse.

• 150 thousand hours of training courses were held in different re-gions, as well as 750 person/hour training for improving issuers’ stan-dards.

Development • Studying TSE’s micro-structures and the related regulations

• Designing and calculating new in-dices and supervising TSETMC’S cal-culations

• Preparing single-stock ETF’s stat-utes and prospectus

• Studying the feasibility of intro-ducing index derivatives products; case studies: index portfolio futures and option contracts

• Reviewing possible mechanisms to increase listed companies’ free float equities

• Reporting on corporate gover-nance index design and calculation

• Studying short term financing

• Searching the listed industries’ individual features and proposing mechanism for proper financing

• 13000 person/hour technical train-ing for market participants

• 1600 person/hour technical train-ing for the brokerage houses

• 7900 person/hour general and pro-motional training

• 474 person/hour technical training for issuers

• 6 training seminars regarding new financial instruments

• Publishing 4 new books and 6 technical brochures

• Holding frequent monitoring ses-sions and quarterly plans controlling trend

Administration • Making the required arrangements for market data distribution

• Ratifying and implementing cap-ital increase from IRR 450 billion to IRR 900 billion

• Holding training courses for the personnel

• Providing credits and facilities to the staff

• Development of rules and guidlines

• Proceeding with the new building development project

In line with the macro strategies, development plans and current affairs were arranged for the fiscal year and accomplished as stated in the following table.

4 – Annual performance and achievements

33

Market - • Trading operations

• Suspending and re-opening oper-ations, trading cancellation and mar-ket-making

• Publishing frequent reports on market activities

• Market surveillance and risk con-trol

CEO and board of directors - • Holding exhibitions and events

• Legal processes and contractual affairs

• Public relations and investors rela-tions

• Quarterly press conferences and other market’s disclosure actions

• Foreign investment and interna-tional relations arrangements

FEAS General Assembly, Nov. 2015, Isfahan

34

5 – Board of directors’ proposal for dividend payments and capital increase

The members of the board would like to ask the shareholders to accept their proposal for the payment of IRR 100 as DPS, and allocating the rest of EPS for reinvestment, due to the ongoing new building development project and other expansion plans. The feasibility study to increase the capital from IRR 900 billion to IRR 1,100 billion has been prepared with the auditor’s report. The study and the report were submitted to the SEO for authorization.

6-2 Macro strategiesThe Exchange’s macro strategies in operational and administrative fields include:

6-1 GoalsGoals are described in the following seven parts:Goal1: increasing capital market’s share in financing economic productive activitiesGoal2: applying effective regulations and procedures in order to protect market’s integrity and shareholders’ rightsGoal3: deepening and expanding the market, as well as facilitating its public access with modern technolo-gy and updated processesGoal4: improving financial literacy and investment culture in the countryGoal5: observing accountability and transparency to interact with all stakeholdersGoal6: Developing physical assets and human capital constantGoal7: Making value for shareholders

6 – Tehran Stock Exchange’s strategic plan

TSE’s strategic plan includes goals and macro strategies, as well as operational and development programs in 2014 as follow:

Designing new financial instruments and trading mechanisms

Increasing efficiency in regional trading floors

Increasing incentives and constant improvements in the staff occupational attitudes

Reviewing organizational regulations and manage-ment settings

Public investment devel-opment and encouraging investors to indirect par-ticipation in the market

Developing investment culture and planning to raise investment base of the country

Constant improvement of human sources capability and efficiency

Planning for less owner-ship centralization and more free float equities in the listed companies

Trading and surveillance infrastructure develop-ment and upgrading

Supporting disclosure system, aiming at miti-gating risks and increas-ing transparency

Developing interaction with the listed companies and providing new mechanisms for monitoring issuers and up-grading internal auditing

Improving listing advi-sors status and role in the listing process

Creating advantage and brand management at TSE

Effective connections with the market’s active partici-pants to establish required regulations and deregulations

Facilitating trading access in cyber space

Effective application of in-ternational memberships and cooperation with in-ternational Exchanges

Cash flow management by capital and money markets’ mechanisms

35

Department Development plans Current affairs

Issuers and members Calculation and publishing corporate gover-nance grade of the listed companies

Revising issuers’ disciplinary mechanism

Revising issuers’ reporting and surveillance structures

Listing 8 new companies and trans-ferring 4 companies from IFB

Listing 3 project and construction funds

Listing 5 participation bonds

Holding 2 industry tables

Holding 150k hour/person in region-al floors

Making 500 visits to brokerage firms

Holding 1k hour/person training for the listed companies directors

Listed companies rating reports

Meetings with mutual funds

Analyzing industrial status

Development Introducing a new product to the market

Cooperating to revise and amend foreign in-vestment regulations

Implementing equity portfolio futures con-tracts

Implementing option contracts trading

Feasibility study on warrants trading

Regulating to launch vulture funds

Acknowledging securities exchanges incen-tives for the listed companies

Calculating and analyzing market’s and in-dustrial risks and rating

Feasibility study on designing and introduc-ing new indices at TSE

Reviewing Iran’s capital market shortcoming in market-making process and comparative analysis with other Exchanges

Revising selection directives for TSE 30 largest and TSE 50 blue-chip indices

Option trading platform establish-ing

Continuous monitoring and season-al control on plans development

Continuous assessment of TSE’s de-partments activities

Holding 5 training seminars in re-gional floors on new instruments and entities

10k hour/person technical courses for markets participants

1k hour/person technical courses for brokerage firms

1k hour/person technical courses for issuers

10k hour/person public and invest-ment courses

Publishing 2 books and 6 brochures

Holding 6 national training seminars

Supporting university projects and research works

6-3 Targets and plans in 2015

36

Administration Establishing and assessing profiles of intelli-gence features among staff

Searching for TSE’s required staff

Designing and implementing Business Intelli-gence )BI( platform

Procuring administrative automation soft-ware

Applying data distribution system

Holding training courses for staff

Installing mechanized system for lo-gistics

Trading directives revision

Integrated management on regional floors internet systems

Pursuing new building construction project

Market Improving )on time information( reporting in BI platform

Trading symbols halt and reopening

Market making of the securities

Trading cancellation

Market reports preparation

Making new contracts in the futures market

Surveillance measures and report making

Bloc and wholesale trading

Special trading price discovery oper-ations

CEO and board direc-tors

Media Comprehensive Initiative

Holding FEAS GAM

Holding and attending exhibitions in 5 regions

Seasonal meetings with stakehold-ers

Members and listing regulations re-vision

Legal consultation

Foreign delegates and international investors reception in the market

37

Forecasted income statement for the fiscal year ending 20 March 2015 (IRR million)

Item FY2014 (Special value)

FY2014 (Main) Audited budget FY2015 (Special

value)

Audited budget FY2015 (Main)

Income from services 513,750 513,750 820,245 820,245

Costs of services )181,027( )181,027( )216,601( )216,601(

Gross income 332,723 332,723 603,644 603,644

Administrative and general ex-penses

)90,709( )90,709( )112,820( )112,820(

Operating profit 241,816 241,816 490,824 490,824

Net other income and non-op-erating expenses

135,348 147,413 38,866 51,230

Profit before including affiliat-ed company’s profit )loss(

377,164 389,229 529,690 542,054

Share in affiliated company’s profit )loss(

47,532 - 401,00 -

Tax on current operations )61,846( )61,846( )125,213( )125,213(

Net profit from current opera-tions

362,850 327,383 444,577 416,841

Net profit per share 403 364 494 463

Tehran Highways

38

39

FEAS General Assembly, Nov. 2015, Isfahan

40

41

Financial StatementsFor the Fiscal Year Ended March 20, 2015

42

Report on the Financial Statements

1. We have audited the balance sheet of Tehran Stock Exchange Corporation as of 1393 and the income and cash flow statements of the Company for the fiscal year ended 3/20/2015, together with notes 1-30 thereof.

Board of Directors’ responsibility

2. The responsibility of financial statements is with the company’s Board of Directors. The board of directors should plan, apply and maintain the relevant internal controls in order to prepare the financial statements which are free from material misstatements resulted from frauds and errors.

Auditor’s and legal Inspector’s Responsibility

3. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with the Auditing Standard of financial statements. These standards require that we meet the requirements of professional ethics and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. The audit includes examining, on a test basis, evidences supporting the amounts and disclosures in the financial statements. Deciding on the auditing methods is on the auditor’s judgment and based on reviewing any risks of material misstatement resulted from frauds and errors in the financial statements. To review the risks, we assess internal controls related to the preparation and presentation of financial statements in order to plan the relevant audit methods in the current circumstances, not to express an opinion on the effectiveness of the internal controls. An audit also includes assessing the accounting principles and procedures used and significant estimates made by the Board as well as evaluating the overall fairness of financial statement presentation. We believe our audit provides a reason-able basis for our opinion. Also, our responsibility is to report to the general assembly of shareholders on any noncompliance with the legal requirements set out in the Commercial Code as amended and the company’s provisions of the Articles of Incorporation.

Opinion

4. In our opinion, the financial statements referred to above present fairly in all material aspects in conformity with Iranian Accounting Standards.

Report of Independent Auditor To the General AssemblyTehran Stock Exchange Corporation

43

Explanatory Note

5. Financial statements of the Company for the year ended 3/20/2015 have been audited by another auditing firm and an unqualified opinion has been reported on 31/5/2014.

Report on Other Legal and Regulatory Requirements

Reports on Duties of Legal Inspector

6. The transaction included in the explanatory note 28 to the financial statements has been examined as all transactions subject to the Article 129 of the Commercial Code, which are conducted and reported to us by the Company’s Board of Directors. We have not observed any evidences indicating that the transaction has not been conducted on the appropriate trade conditions and in normal course of the company’s activities.

7. We have examined the report of the Board of Directors to the Annual General Meeting of the company in respect of the Company’s general status and activities, as the subject of the article 232 of the Commercial Code. Based on our examinations, we have not observed any material cases of non-conformity of the provided infor-mation with books and records submitted to us by the Board of Directors.

8. With respect to compliance of companies registered with Securities and Exchange Organization with re-quired rules and regulation, we have examined the disclosure procedure for these companies. We have not ob-served any material cases of non-compliance with the rules and regulations, except no preparation of interim financial statements of the period ended 21/6/2014.

Report on Other Auditor’s Legal and Regulatory Responsibilities

9. With respect to the article 33 of anti-money laundering rules for auditors, we have examined the rules and procedures compliance in the framework of auditing standards. We have not observed any material cases of non-compliance with the rules and procedures.

15 June 2015Bayat Rayan Audit and Financial Services Firm

44

We would like to submit the financial statements of Tehran Stock Exchange Corporation for The fiscal year end-ed March 20, 2015. Components of the financial statements are as followings: Equity method Primary Financial Statements

• Balance sheet• Income statement Retained earnings account• Cash flow statement

Primary Financial Statements• Balance sheet• Income statement Retained earnings account• Cash flow statement

Explanatory Notes• History• Basis for preparing Financial Statements• Equity basis• Significant Accounting policies• Notes to the Financial Statements )items and numbers(

The financial statements have been prepared according to the National Accounting Standards and they have been approved by the Board of Directors on May 26, 2015.

Members of the Board of Directors

Member of the Board of Directors Legal Person Position

Mellat Financial Group Mohammad Ebrahim Mohammad Poorzandi

Chairman

Mofid Brokrage Co. Ali Yarsalehi Vice Chairman

Bank Tejarat Brokrage Co. Seyed Mojtaba Fahim Hashemi Non-executive member

Bahman Investment Co. Ali Rostami Non-executive member

Saba Tamin Investment Co. Mohammad Reza Rostami Non-executive member

Pasargad Bank Value Creation Group Ali Akbar Amin Tafreshi Non-executive member

Tadbir Investment co. Mojtaba Taghipoor Non-executive member

Hasan Ghalibaf Asl Managing director

Tehran Stock Exchange CorporationFinancial Statements

For the Fiscal year ended March 20, 2012

45

Equity Method Balance Sheet -M

arch 20, 2015

Assets

Note

March 20,2015

Million Rials

March 20,2014

Million Rials

Liabilities & shareholders’ equity

Note

March 20,2015

Million Rials

March 20,2014

Million Rials

Current Assets:

Current Liabilities:

Cash & Bank

56,631

25,860O

ther accounts Payable14

80,49988,821

Short Term Investm

ents6

432,828531,500

Dividends

153,670

2,971

Trade Accounts Receivable7

30,13219,234

Provision for Taxes16

85,709114,763

Other Accounts Receivable

837,911

38,817

Prepayments

93,017

3,143

Total Current Assets

510,509618,554

Total Current Liabilities142,878

206,562

Non-Current A

ssets:N

oncurrent liabilities:

Tangible Fixed assets10

886,143513,286

Intangible assets11

3,1462,721

Provisions for Employees’ Term

ination Benefits17

28,04319,144

Long Term Investm

ents12

146,906107,739

Other A

ssets13

16,04861,887

Total Non-Current A

ssets1,052,243

685,633Total N

on-Current Liabilities28,043

19,144

Total Liabilities170,921

225,706

Shareholders’ equity:

Paid-in capital)900 million shares paid totally(

18900,000

450,000

Legal reserve19

61,36945,000

prudential reserve19

65,823114,346

Retained earning364,639

469,135

Total Shareholders’ equity1,391,831

1,078,481

Total Assets

1,562,7521,304,187

Total Liabilities and Shareholders, Equity1,562,752

1,304,187

Explanatory notes are an integral part of financial statements.

46

Equity Method Income StatementFor the Fiscal year ended March 20, 2015

Note Fiscal year endedMarch 20,2015

Fiscal year endedMarch 20,2014

Million Rials Million Rials

Services revenue 20 513,750 683,519

Cost of services 21 )181,027( )143,130(

Gross income 332,723 540,389

Administrative and general expenses 22 )90,907( )77,599(

Operating profit 241,816 462,790

Net other non-operating income and expenses 23 135,348 99,238

Income irrespective of income from associate companies 377,164 562,028

Income from associate companies 12 47,532 44,002

Income before tax 424,696 606,030

Income tax 16 )61,846( )116,138(

Net income 362,850 489,892

Earnings per share 403 544

Revenue 203 388

Gains 200 156

Retained Earnings Account

Net Income 362,850 489,892

Retained earnings at the beginning of the period 469,135 251,983

Allocatable income 831,985 741,875

Income allocation:

Capitalization 18 )336,000( )106,150(

Dividend )49,500( )60,000(

Legal reserve 19 )16,369( )15,000(

Prudential reserve 19 )65,477( )91,590(

Allocated income during the period )467,346( )272,740(

Retained earnings at the end of the period 364,639 469,135


47

Equity Method Cash flow StatementFor the Fiscal year ended March 20, 2015

Note

Fiscal year ended March 20,2015

Fiscal year ended March

20,2014

Million Rials


Operating activities:

Net cash inflow from operating activities 24 241,935 533,821

Return on investments and servicing of finance:

Interest received from short-term investment 118,805 86,289

Earnings received from long-term investment 1,461 894

Dividends Paid )48,808( )59,767(

Net cash inflow )Outflow( from Investment Returns and servicing of finance 71,458 27,416

Income tax:

Income Tax paid )117,900( )36,318(

Investing activities:

payments for acquisition of short-term investment - )361,500(

Payments for acquisition of tangible and intangible assets )361,614( )155,164(

payments for acquisition of long term investments )1,653( -

Receipts from tangible fixed asset sales 363 -

Receipts from short term investment sales 98,672 -

Receipts from long-term investment sales - 160

Receipts from prudential reserve release 49,500 -

Net cash out flow from investing activities )214,732( )516,504(

Net cash increase )19,239( 8,415

Cash Balance at the beginning of the period 25,860 17,445

Cash balance at the end of the period 6,621 25,860

Non-cash trades 2,047 1,245


48

Bala

nce

Shee

t -M

arch

20,

201

5

Ass

ets

Not

eM

arch

20,

2015

M

illio

n Ri

als

Mar

ch 2

0,20

14

Mill

ion

Rial

sLi

abili

ties

& s

hare

hold

ers’

equi

tyN

ote

Mar

ch 2

0,20

15

Mill

ion

Rial

sM

arch

20,

2014

M

illio

n Ri

als

Curr

ent A

sset

s:Cu

rren

t Lia

bilit

ies:

Cash

& B

ank

56,

621

25,8

60O

ther

acc

ount

s Pa

yabl

e14

80,4

9988

,821

Shor

t Ter

m In

vest

men

ts6

432,

828

531,

500

Div

iden

ds15

3,67

02,

978

Trad

e Ac

coun

ts R

ecei

vabl

e7

30,1

3219

,234

Prov

isio

n fo

r Tax

es16

58,7

0911

4,76

3

Oth

er A

ccou

nts

Rec

eiva

ble

837

,911

38,8

17

Prep

aym

ents

93,

017

3,14

3

Tota

l Cu

rren

t Ass

ets

510,

509

618,

554

Tota

l Cur

rent

Lia

bilit

ies

142,

878

206,

562

Non

-Cur

rent

Ass

ets:

Non

curr

ent l

iabi

litie

s:

Tang

ible

Fix

ed a

sset

s10

886,

143

513,

286

Inta

ngib

le a

sset

s11

3,14

62,

721

Prov

isio

ns fo

r Em

ploy

ees’

Term

inat

ion

Bene

fits

1728

,043

19,1

44

Long

Term

Inve

stm

ents

1234

,839

31,1

39

Oth

er A

sset

s13

16,0

4861

,887

Tota

l Non

-Cur

rent

Ass

ets

940,

176

609,

033

Tota

l N

on-C

urre

nt L

iabi

litie

s28

,043

19,1

44

Tota

l Li

abili

ties

170,

921

225,

706

Shar

ehol

ders

’ equ

ity:

Paid

-in c

apita

l)900

mill

ion

shar

es p

aid

tota

lly(

1890

0,00

045

0,00

0

Lega

l res

erve

1961

,369

45,0

00

prud

entia

l res

erve

1965

,823

114,

346

Reta

ined

ear

ning

252,

572

392,

535

Tota

l Sh

areh

olde

rs’ e

quit

y1,

279,

764

1,00

1,88

1

Tota

l A

sset

s1,

450,

685

1,22

7,58

7To

tal L

iabi

litie

s an

d Sh

areh

olde

rs, E

quit

y1,

450,

685

1,22

7,58

7

Expl

anat

ory

note

s ar

e an

inte

gral

par

t of fi

nanc

ial s

tate

men

ts.

49

Income StatementFor the Fiscal year ended March 20, 2015

Note Fiscal year endedMarch 20,2015

Fiscal year endedMarch 20,2014


Services revenue 20 513,750 683,519

Cost of services 21 )181,027( )143,130(

Gross income 332,723 540,389

Administrative and general expenses 22 )90,907( )77,599(

Operating profit 241,816 462,790

Net other non-operating income and expenses 23 147,413 111,297

Income before tax 389,229 574,087

Income tax 16 )61,846( )116,138(

Net income 327,383 457,949

Earnings per share 29 364 509

Revenue 203 402

Gains 161 107

Retained Earnings Account

Net Income 327,383 457,949

Retained earnings at the beginning of the period 392,535 207,326

Allocatable income 719,918 665,275

Income allocation:

Capitalization 18 )336,000( )106,150(

Dividend )49,500( )60,000(

Legal reserve 19 )16,369( )15,000(

Prudential reserve 19 )65,477( )91,590(

Allocated income during the period )467,346( )272,740(

Retained earnings at the end of the period 252,572 392,535


50

Cash flow StatementFor the Fiscal year ended March 20, 2015

Note

Fiscal year ended March 20,2015

Fiscal year ended March

20,2014

Million Rials


Operating activities:

Net cash inflow from operating activities 24 - 229,870 521,762

Return on investments and servicing of finance:

Interest received from short-term investment 118,805 86,289

Earnings received from long-term investment 13,526 12,953

Dividends Paid )48,808( )59,767(

Net cash inflow )Outflow( from Investment Returns and servicing of finance 83,523 39,475

Income tax:

Income Tax paid )117,900( )36,318(

Investing activities:

payments for acquisition of short-term investment - )361,500(

Payments for acquisition of tangible and intangible assets )361,614( )155,164(

payments for acquisition of long term investments )1,653( -

Receipts from tangible fixed asset sales 363 -

Receipts from short term investment sales 98,672 -

Receipts from long-term investment sales - 160

Receipts from prudential reserve release 49,500 -

Net cash out flow from investing activities )214,732( )516,504(

Net cash increase )19,239( 8,415

Cash Balance at the beginning of the period 25,860 17,445

Cash balance at the end of the period 6,621 25,860

Non-cash trades 25 2,047 1,245


51

1.1. History

Tehran Stock Exchange Corporation has been founded according to the Securities Market Law approved on November 22, 2005, and registered with the number 286502 with the Companies & Non-commercial Institu-tions Registration Office in Tehran. The head office of the company is located in Tehran and has 23 Branches within the country and an independent registered branch in Kish Island by now.

1.2. Main Activities

According to the Provision 2 of the Articles of Incorporation, the main activities of the company are:

• Establishing, organizing and operating the Stock Exchange for making trades on listed securities by Iranian and foreign parties according to the law and regulations.

• Listing securities including securities of foreign issuers according to the law and regulations.

• Determining the brokerage membership conditions for different groups of members, admitting the mem-bership applicants, and enactment and enforcement of professional and disciplinary principles.

• Providing conditions necessary for fair access of members to trades of listed securities.

• Cooperation and Consistency with the other financial institutions undertaking responsibilities related to securities trades, making researches, training, culture developing, and cooperation with other Iranian and for-eign Exchanges to share information and experiences.

• Supervising well conduction of listed securities transactions and supervising issuers’ activities. Providing, collecting, processing and issuing information related to securities, and performing other duties according to the law and regulations.

1.3. Employment position

The number of employees at the end of the financial period is as follows:

1. Background

Permanent and temporary employee March 20,2015 March 20,2014

267 263

52

The financial statements )primary financial statements and equity method financial statements( of the Com-pany have been prepared mainly on historical cost basis and, where necessary, current values have been used.

3.1. Equity method financial statements have been prepared through aggregation of items of Tehran Stock Exchange financial statements with TSE’s share of changes in net assets and operation results of its associated companies including Farabourse )out of the counter( Company and Central Asset Management of Capital Mar-ket, less of unrealized gains and losses from transactions.

3.2. The investor company’s share of associated companies’ operation has been reflected in income and com-prehensive income statements as the case may be.

3.3. The fiscal year for TSE Corporation and Farabourse Corpotation is ended March and that of Central Asset Management of Capital Market )private stock( is ended January of every year.

4.2. Tangible fixed assets

4.2.1. Tangible fixed assets are carried on the cost basis. Costs for betterment and substantial repairs resulting in a significant increase in the capacity and useful life of fixed assets or an improvement of their output qual-ity, are accounted for as capital costs and depreciated during the remaining useful life of the relevant assets. Costs necessary to maintain the normal capacity of the assets like maintenance and insignificant repairs, are accounted for as expenses of the period when incurred.

Evaluation method Equity method financial statements Investor’s financial statements

Long term invest-ments:

Investment in associ-ates

Equity method Cost )less accumulated impairment of investments(

Other long term in-vestments

Cost )less accumulated impairment of investments(

Cost )less accumulated impairment of investments(

Revenue recognition method:

Investment in associ-ates

Equity method At earning approval by the investee’s general association of shareholders )until financial statements approval(

Other long term and current investments

At earning approval by the investee’s general association of shareholders

)until the balance sheet date(

At earning approval by the investee’s general association of shareholders

)until the balance sheet date(

2. Basis for preparing financial statements

3. Basis for equity method

4. Significant accounting policies

4.1. Investments

53

4.2. Tangible fixed assets

4.2.1. Tangible fixed assets are carried on the cost basis. Costs for betterment and substantial repairs resulting in a significant increase in the capacity and useful life of fixed assets or an improvement of their output qual-ity, are accounted for as capital costs and depreciated during the remaining useful life of the relevant assets. Costs necessary to maintain the normal capacity of the assets like maintenance and insignificant repairs, are accounted for as expenses of the period when incurred.

4.2.2. Depreciation of tangible fixed assets are calculated based on the estimated useful life of the asset, ac-cording to the depreciation regulations included in the Article 151 of the amendment of the Direct Taxation Act approved in 1988 and on the basis of the following rates and methods:

4.2.3. Fixed assets acquired and used within a month are depreciated and carried from the beginning of the next month. When an asset is not used for any reason like work stopping, its depreciation will be equivalent to 30% of the depreciation rate included in the table above.

4.3. Foreign currency translation

Foreign currency items with the formal exchange rate at the balance sheet date and expenses carried in for-eign currency at historical cost are translated with the formal exchange rate at the date the transaction is en-tered into. Differences arising from settlement or exchange of foreign currency items are recognized as income or expenses of the period when incurred.

4.4. Provision for employees’ termination benefits

Provision for employees’ termination benefits are calculated and carried according to their last monthly fixed salary and continuous benefits for every year of their service.

4.5. Revenue recognition

Revenue sources of the Company are commissions from trading, admitting and listing fees, brokerage fees, broker services and other sources. The income resources are recognized as realizing over the time when ser-vices are rendered and as proportionate to the service time length.

4.6. Intangible assets

Intangible assets are carried on the cost basis and amortizable intangible assets )software( are amortized until maximum 3 years.

Assets Depreciation rate Depreciation method

Buildings 7% Diminishing balance

Computer system and hardware 3, 10 year Straight line

Administrative equipments 10 year Straight line

Vehicles 25% Diminishing balance

Constructions of the rental building 3 Straight line

54

The company’s cash in hand at the balance sheet date are as following:

March 20,2015 Million Rials March 20, 2014 Million Rials

Bank accounts )Rial( 5,133 24,846

Fund )Rial, foreign currency( 5-1 1,088 655

Bank accounts )foreign currency( 5-2 400 359

Total 6,621 25,860

5.1. The balance of foreign currency fund has been included 4,288 Dollars, 9,036 Euro, 4,441 Pound, and 2,665 Yuan which have been converted to 33,530 Rial, 36,450 Rial, 50,900 Rial and 5,350 Rial, respectively.

5.2. The balance of foreign currency bank accounts has been included 14,296.81 Dollars, 2.54 Euro which have been converted to 27,994 Rial and 30,156 Rial respectively, at the balance sheet date.

5. Cash

Notes March 20,2015 Million Rials March 20,2014 Million Rials

Bank Melli deposits - 200,000

Bank Pasargad deposits 100,000 -

Bank Parsian short term deposits 6-2 93,591 -

Bank Sarmaye deposits - 21,500

Bank Day deposits 200 40,000

Bank Tejarat deposits 5,064 170,000

EN Bank deposits - 100,000

Mashad Municipality participa-tion Bonds 6-1 50,000 -

Gole Gohar Co. participation Bonds 6-1 183,973 -

432,828 531,500

6.1. Investments in participation bonds includes 70,000 participation bonds of Mashad Municipality and 180,320 participation bonds of Gole Gohar Co. with 20% interest rate and 1,000,000 Rial par value for each sheet.

6.2. Short term deposits in Parsian Bank will be held for more than 3 months.

6. Short – term investments

55

The receivables are including:

Note March 20,2015 Provision for doubtful debts Net March 20,2014

Million Rials Million Rials Million Rials Million Rials

Central depository and settlement corporation 7-1 12,051 - 12,051 14,187

Listed companies )list-ing fees( 7-2 9,880 4,102 5,778 3,362

Brokerage )rent and service( 7-3 12,303 - 12,303 1,685

34,234 4,102 30,132 19,234

7.1. The amount, as the trade commission for the company in the last three days of the year, has been depos-ited and settled by Central Depository and Settlement Corporation on 31/3/2015.

7.2. The amount includes 1,066 million Rial admission fee and 8,814 million Rial listing fee receivable from firms listed in TSE, from which the amount 4,102 million Rial is carried as Provision for doubtful debts.

7.3. The balance refers to brokerage services fee amounted 12,238 million Rials and rentals amounted 65 mil-lion Rial, from which 4,960 million Rial has been received up to the financial statements approval.

Notes Amount (Million Rials)March 20,2015

Amount (Million Rials)March 20,2014

Associated companies:

Over the counter 8-1 13,199 14,258

Financial centre 224 2,175

Others:

Loans to Employees )current portion( 9,445 7,862

Income from short-term investment 7,326 4,185

Rentals receivable from banks 8-2 3,142 3,504

Security for building lease 2,670 3,420

Energy Exchange 119 1,213

Security and Exchange Organization 339 -

Other 1,447 2,200

37,911 38,717

7. Trade accounts receivable

8. Other Accounts Receivable

56

8.1. The balance of the receivable includes 12 billion Rial dividend for the financial year ended 20/3/2015 and the company’s share of common expenses.

The balance of prepayments is including:

NoteMarch 20, 2015

Million RialMarch 20, 2014 Million Dollars

Costs, goods and services 9-1 1,387 2,315

Tax 3,961 1,375

Insurance 1,630 828

6,978 4,518

Tax reserve transfer 16 )3,961( )1,375(

3,017 3,143

9.1. Up to financial statements approval, 550 million Rial from the prepayments refer to goods and services.

9. Prepayments

57

Cost- million Rial

Retained depreciation-million Rial

Book value- million Rial

Description

Note

Balance on

2014/3/20A

dditions

Sold

assets

Disposal

assets

Trans -

fers and

Others

Balance

on

2014/3/20

Balance

on

2014/3/20

During

the year

sold

assets

Disposal

assets

Trans -

fers

Balance

on

2014/3/20

Balance

on

2014/9/22

Balance

on

2014/3/20

Land217,567

--

-110,000

327,567-

--

--

-327,567

217,567

Constructions

on Hafez

building

2,814-

--

-2,814

747829

--

-1,576

1,2382,067

Building18,997

--

--

18,9976,278

891-

--

7,16911,828

12,719

Equipment,

Fixtures and

Computer

24,8008,261

)200()133(

82933,557

13,1495,211

)138()104(

-18,118

15,43911,651

Vehicle2,611

--

--

2,6111,050

390-

--

1,4401,171

1,561

Total266,789

8,261)200(

)133(110,829

385,54621,224

7,321)138(

)104(-

28,303357,243

245,565

Assets in

progress10-6

188,116224,987

--

73,941487,044

--

--

--

487,044188,116

Capital pre -

payments

10-422,460

147,021-

-)136,543(

32,938-

--

--

-32,938

22,460

Capital inven -

tory10-5

57,145-

--

)48,227(8,918

--

--

--

8,91857,145

Total534,510

380,269)200(

)133(-

914,44621,224

7,321)138(

)104(-

28,303886,143

513,286

10. Tangible Fixed Assets

58

10.1. All tangible fixed assets amounted 52,928 million Rials are insured against fire, flood and earthquake,

10.2. Equipment and fixtures additions are mainly related to purchasing computers and hardware, and net-work equipments.

10.3. Details related to assets sold are as following:

Description Cost Retained depreci-ation Book value Sale price Sale loss

Million IRR Million IRR Million IRR Million IRR Million IRR Million IRR

Furniture, fixtures and computer 333 242 91 363 272

10.4. The capital prepayments are amounted 32,938 million Rial in 2015 as compared to 22,460 Million Rial in 2014.

10.5. Capital inventory refers to ironware for construction of the new building.

10.6. The balance of assets in progress heading refers to the new building which almost 47% is completed up to financial statement approval. It is expected to be completed 100% at the end of the year 1394.

March 20, 2015 Million Rial

March 20, 2014 Million Dollars

Building project costs 1,807,703 1,289,500

Costs incured )845,290( )460,243(

Progress percent )Rial( 47 35

10.7. The project is insured up to 352 Billion Rial.

The intangible assets are including:

Note March 20, 2015 Million Rial

March 20,2014 Million Rial

Water Membership fee 1,738 1,738

Regional floor Branches 710 709

Software 11-1 503 148

2 line of PRA link , MPLS and PTMP lines, 22 Mobile lines and 32 telephone line 195 126

3,146 2,721

11-Intangible Assets

59

11.1. Software in the com

pany is including:

Cost Million Rials

Retained Am

ortization M

illion RialsBook value M

illion Rials

Balance on

2014/3/20Purchases

Balance on2015/3/20

Balance on2014/3/20

During

the yearBalance on2015/3/20

Balance on2015/3/20

Balance on2014/3/20

Future Contract Software

700-

700700

-700

--

Firm valuing softw

are170

7177

11458

1725

56

Didgah softw

are-

251251

-32

32219

-

Free floats follow-up system

-112

112-

2222

90-

Shareholders information softw

are-

9393

-8

885

-

Other Softw

are273

52325

18140

221104

92

1,143515

1,658995

1601,155

503148

60

Long term investments in companies are including:

Equity method Investor

March 2015 Million Rials

March 2014 Million Rials

March 2015 Mil-lion Rials

March 2014 Mil-lion Rials

No. of Shares

Invest-ment% Cost-equity Cost-equity Cost Cost

Associated companies:

Over the counter Corpo-ration of Iran 80,000,000 20 126,781 94,882 20,000 20,000

Central Asset Manage-ment Pvt. 200,000 20 5,494 1,926 208 208

Iran financial center )private Joint( 2,000,000 20 2,000 40 2,000 40

Other long term in-vestments:

Energy Exchange Corpo-ration 870,000 0.5 2,610 870 2,610 870

Iran mercantile Ex-change corporation 58,500 0.01 21 21 21 21

Central depository and settlement corporation 15,000,000 5 10,000 10,000 10,000 10,000

146,906 107,739 34,839 31,139

12.1. Since the TSE has insignificant share of net assets of Central Asset Management Company, we do not use equity method for investment in this company.

12.2. Investment in OTC of Iran is subject to Equity method as the following:

Note 2015 2014

Share of net asset

Good-will

Share of total net

assets

Share of net asset

Good-will

Share of total net

assets

Million IRR

Million IRR Million IRR Million

IRRMillion

IRR Million IRR

Balance at the be-ginning of the year 94,882 - 94,882 63,744 - 63,944

Share of the financial year profit 12-2-1 43,899 - 43,899 43,138 - 43,138

Dividend receivable 12-2-2 )12,000( - )12,000( )12,000( - )12,000(

126,781 - 126,781 94,882 - 94,882

12-Long –Term investments

61

12.2.1. Income from investment of TSE in OTC, as amounted 43,899 million IRR, has been calculated and in-cluded in the financial statements based on equity method.

12.2.2. Share dividend of OTC has been 200 IRR per share for financial year ended 2014/3/20 and 150 IRR per share for financial year ended 2015/3/20 according to decision of the General Association of Shareholders on 2015/5/23.

12.3.1. Income from investment in Central Asset Management Company, as amounted 3,663 million IRR, has been calculated based on equity method and included in the financial statements.

12.3.2. Share dividend of Central Asset Management Company has been 71 IRR per share for financial year ended 2014/1/20 and 327 IRR per share for financial year ended 2015/1/20 according to decision of the General Association of Shareholders on 2015/3/11.

12.2.3. Significant parts of OTC’s balance sheet and income statements based on equity method for the finan-cial year ended 2015/3/20 are as following:

12.3. Investment in Central Asset Management Company is subject to the equity method as following:

Income statements

Million IRR

Services revenue 226,992

Expenses )7,499(

Net income 219,493

Balance sheet

Million IRR Million IRR

Current assets 383,056 Current liabilities 85,137

Non-current assets 411,305 Non-current liabilities 2,985

Capital 400,000

Reserves 123,605

Retained profit 162,634

Total assets 774,361 774,361

Note 2015 2014

Share of net asset Goodwill Share of total

net assetsShare of net asset Goodwill Share of total

net assets

Million IRR

Million IRR Million IRR Million

IRRMillion

IRR Million IRR

Balance at the be-ginning of the year 1,926 - 1,926 1,121 - 1,121

Share of the financial year profit 12-3-1 3,633 - 3,633 864 - 864

Dividend receivable 12-3-2 )65( - )65( )59( - )59(

5,494 - 5,494 1,926 - 1,926

62

12.3.3. Significant parts of Central Asset Management Company’s consolidated balance sheet and consolidat-ed financial statements for the financial year ended 2015/1/20 are as following:

Other assets are including:

Consolidated Balance sheet

Million IRR Million IRR

Current assets 58,838 Current liabilities 51,016

Non-current assets 20,715 Non-current liabilities 501

Capital 1,000

Reserves 100

Retained profit 26,700

Minority Interest 236

Total assets 79,553 79,553

Consolidated Income statements

Million IRR

Services revenue 16,224

Expenses )16,366(

Other operating income and expenses 18,459

Minority interest )151(

Net income 18,166

Note March 20, 2015 Million Rial March 20, 2014 Million Rial

A prudential reserve security with SEO 13-1 500 50,000

Employee’s loan )long term( 15,048 11,387

Nikoukari fund 500 500

16,048 61,887

13. Other assets

63

Note March 20, 2015 Million Rial

Mar 20, 2014 Million Rial

Brokers )received additions( 14-1 19,866 50,665

Performance bond deposit 14-2 19,324 9,867

Insurance deposit 14-3 16,042 6,259

Employee’s saving fund 14-4 10,975 5,339

Provision for employees’ unapplied allowed leave 5,523 3,898

Taxes payable 14-5 3,249 2,793

Insurance Premium 14-6 1,649 1,293

Information company 14-7 672 -

Provision for incurred and unpaid expenses 14-8 1,567 3,183

Securities and Exchange Organization - 3,858

Other 1,632 1,666

80,499 88,821

14.1. This amount is mainly related to additional amounts received from some brokerages, which has been finalized on 2014/3/20 and paid and settled up to 2014/4/20.

14.2. This amount is mainly related to Performance bonus deposit for the new building construction agree-ments.

14.3. This amount is mainly related to Insurance deposit for the new building construction agreements.

14.4. This amount is related to employee’s investment deposit including 3% wages and salaries and 3% share of the company together with its profits. Also, 5495 million IRR from the balance of Employee’s saving fund as amounted 16,470 million IRR at the balance sheet date has been paid to the employees as an interest-free loan.

14.5. This amount includes 1,330 million IRR as the tax of wages and salary of the employee at the end of the year and 1,919 million IRR as withholding tax.

14.6. This amount is related to insurance Premium of employees’ salaries and wages in the last month of the year.

14.7. This amount is related to the security employee’s fee in the last month of the year.

14.8. This amount is mainly related to costs of water, electricity, gas and other outstanding expenses of the third month of the year 2015, from which 1,494 million IRR has been paid up to financial statement approval.

14. Other Accounts Payable

64



Dividend in 1392 1,387 -

Dividend in 1391 821 1,032

Dividend in 1390 357 650

Dividends in 1389 425 542





3,670 2,978

15.1. Dividend approved in 2014 as amounted 49,500 million IRR has been paid according to the schedule. The balance of this account is related to a number of natural and legal shareholders without the introduced bank account. During the financial year, 48,808 million IRR from total annual dividend has been paid. Up to financial statement approval, 82 million IRR of the above mentioned balance has been paid.

Summary of the provision for taxes is as the followings:

Fiscal Year

March 20,2012 -(Million Rials) March 20,2011 Mil-

lion Rials Basis for recognition

Tax

declared profit (Loss)

Income taxable

declared assessed finalized paid provi-sion

balance

provision balance

1391 199,294 148,971 37,243 38,636 - 37,243 - Tax dispute settlement authorities

1392 574,087 464,553 116,138 - - 115,314 824 116,138 Taxes and books audit-

ing

1393 327,383 247,382 61,846 - - - 61,846 Not audited

62,670 116,138

Tax Prepay-ments

)3,961( )1,375(

Total 58,709 114,763

15. Dividends

16. Provision for Tax

16.1. Performance tax of the previous years has been finalized and settled up to 2012/3/19.

65

Turnover of this account is as follows:

At the balance sheet date, the company’s shareholders according to the article 9 of the Constitution are clas-sified as:

18.1. According to the article 11 of the Constitution, anybody in every time may own directly or indirectly )through related parties( maximum 2/5 percent of the company’s share.

18.2. On 2014/6/22, the company’s share has increased from 450 billion IRR to 900 billion IRR from retained prof-it and legal reserve. The increase has been registered with Office for Registration of Companies on 2014/10/19.



Balance at the beginning of the year 19,144 12,634

Paid out during the year 10,176 7,122

Current year provision )1,277( )612(

Balance at the end of the year 28,043 19,144

Mar 20,2015 Mar 20, 2014

Shareholders Shares % Shareholders Shares %

Brokers 76 305,701,992 34 75 152,840,996 34

Financial institutions

78 353,555,992 39.2 75 176,741,996 39.2

Other 5,888 240,742,016 26.8 5,571 120,417,008 26.8

Total 6,024 900,000,000 100 5,721 450,000,000 100

Financial year ended 2015/3/20

Legal Reserve Million Rials

Prudential Reserve Million Rials

Balance at the beginning of the year 45,000 114,346

Raising during the year 16,369 65,477

Transfer to the capital - )114,000(

Balance at the end of the year 61,369 65,823

17. Provision for employees’ termination benefits

18. Capital

19. Reserves

66

20.1. According to the approval of the Securities & Exchange Organization, income from trading commission and future contracts commission has been calculated based on value of per transaction up to 400 million IRR.

20.1.1. The income decrease as compared to the previous year is as a result of volume and value decrease of share traded.

20.2. Income from broker services

Note March 20, 2015 Million Rials

March 20, 2014 Million Rials

Income from trading commission 20-1 305,127 554,629

Income from broker services 20-2 165,554 90,064

Income from listing fees 20-3 25,256 25,459

Rentals 20-4 17,813 13,367

Total 513,750 683,519

March 20, 2015 Million Rial March 20, 2014 Million Rial

Normal transactions 293,102 546,987

Whole trading 9,604 5,642

Future contracts and participation bonds 2,421 2,000

Total 305,127 554,629

20. Services Revenue

Notes March 20, 2015 Million Rials


Trading system fees 20-2-1 140,327 74,603

Brokerage fees 9,683 9,350

Exchange floor trading station fees 15,367 5,727

Trading stations permit fees 177 384

Total 165,554 90,064

20.2.1. According to the Board of directors’ approval, trading system fees have been increased 25 million IRR for every trading floor and brokerage fees have been increased 10% up to 1,200 million IRR maximum, provid-ed that, fixed and changing trading system fees do not exceed 200 million IRR.

20.3. Income from listing fees

Note March 20, 2015 Million IRR March 20, 2014 Million IRR

Listing fees 20-3-1 15,625 15,609

Admission fees 20-3-2 9,631 9,850

25,256 25,459

67

20.3.1. According to the approval of the Securities and Exchange Organization, Listing fees are as equivalent to 0.002 of capital and maximum 50 million Rials for every year.

20.3.2. According to the approval of the Securities and Exchange Organization, admitting fees are annually as equivalent to 0.002 of capital and maximum 500 million Rial for the companies that their capital are equivalent or less than 250 billion Rials and 1000 Million Rials for the companies that their capital are more than 250 billion IRR .The fees are received only at the admission time.

20.4. Income from regional floors’ rental is related to the agreements entered into by brokerages for using offices.

The costs of services are including:

21.1. Items of salary and wages are including:

21.1.1. Increases in the direct wages and salaries are as a result of approvals by the board and the ministry of labor and social affairs.

21.2. The cost of supply and maintenance of regional floors are including:

Note March 20, 2015 Million Rials


wage and salary 21-1 123,427 92,918

Supply and maintenance of Regional floors 21-2 41,521 35,290

Floors security forces fees 9,912 8,238

Computers, communications and technology costs 3,484 3,388

Conference and exhibition costs 2,152 2,871

Council duty 399 317

Marketing and development of markets and financial instruments 132 108

181,027 143,130

Note March 20, 2015 Million IRR

March 20, 2014 Million IRR

Salary and wages 21-1-1 59,322 45,220

New year bonus and rewards 32,336 24,128

Insurance premium by employer 12,367 8,472

Over time pay 7,129 5,880

Employee’s termination benefits 7,151 4,879

Mission allowance and traveling costs 2,139 2,460

Others 2,983 1,879

123,427 92,918

21. Cost of services:

68



Rentals for regional floors buildings 21-2-1 23,446 20,959

Depreciation costs 5,987 4,941

Water, Electricity, Telephone and Gas 3,218 2,555

Repair and maintenance of floors 3,428 2,621

Entertainment 955 900

Services fee 1,878 863

Duty 446 832

Consumer goods 608 451

Transfers 359 276

Other 1,196 892

41,521 35,290



Salaries and wages 23-1 62,372 53,050

Rent of building 10,459 9,090

Water, Electricity, Phone and Gas 3,039 2,292

The Board bonus 1,925 1,750

Council duty 1,858 1,748

Administrative and consumable supplies 1,534 1,364

Depreciation Cost 1,494 519

Entertainment 1,564 1,141

Meetings 1,162 845

Legal expenses 929 308

The board attending compensation 740 663

Publication cost 645 747

Withholding and legal tax of the year 1391 511

Repair and maintenance 482 328

Membership fee of professional associations 471 705

Transfers 466 332

Bad debt expenses 298 -

Computer supplies 216 1,517

Others 742 1,200

Total 90,907 77,599

22. General and Administrative Expenses

69

22.1. Compensation costs are including:

March 20, 2015 Million IRR March 20, 2014 Million IRR

Salaries, wages 28,531 23,107

bonus and rewards 14,119 15,262

Over time payments 5,752 4,958

Insurance premium by employer 5,800 4,224

Mission allowances and traveling costs 3,488 2,252

Employees’ termination benefits 2,715 1,789

Others 1,967 1,458

Total 62,372 53,050

Reconciliation of operating profit to net cash inflow from operating activities is as the followings:

Note Equity method The Company

March 20, 2015 Million

IRR


IRR


IRR


IRR

Bank deposit interest 109,292 89,461 109,292 89,461

Contribution bonds 12,654 - 12,654 -

Income from rentals 23-1 12,516 10,075 12,516 10,075

Central depository corporation’s dividend

1,500 840 1,500 840

Energy Exchange dividend 87 44 87 44

Net profit )loss( of the foreign currency exchange

2 186 2 186

Iran mercantile Exchange divi-dend

12 10 12 10

Over the Counter Exchange divi-dend

- - 12,000 12,000

Central Asset Management divi-dend

- - 65 59

Income from tangible fixed assets sale

272 )9( 272 )9(

Others 23-2 )987( )1369( )987( )1369(

Total 135,348 99,238 147,413 111,297

23. Net other income and non-operating expenses

24. Reconciliation of Operating Profit

70

Equity Method The Company





Operating profits 241,816 462,790 241,816 462,790

Increase in employees’ termina-tion benefits

8,899 6,510 8,899 6,510

Depreciation expenses 7,481 5,460 7,481 5,460

Decrease )increase( in operating accounts receivable

)12,421( )10,853( )12,421( )10,853(

Increase )decrease( in prepay-ments

126 )2,741( 126 )2,741(

Increase )decrease( in operating accounts payable

)27,562( 51,385 )27,562( 51,385

Associated companies’ dividend 12,065 12,059 - -

Other non-operating income and expenses

11,531 9,211 11,531 9,211

241,935 533,821 229,870 521,762

26. Contingent Liabilities and Capital Obligations

25. Non-cash TradesNon-cash trades of the financial year are related to capital increases in the investees from 2,047 million IRR receivables from them.

According to the last estimates regarding to construction costs of the new building of the company )1,807,703 million IRR( on 2015/3/20, from which 845,290 million IRR has been paid up to the balance sheet date, the cap-ital obligations of the company are totally 245,838 million IRR.

Amount paid Capital

Million IRR Million IRR Million IRR

Completion operation agreement 293,064 76,914 216,150

Supervisor agreement 7,650 7,649 1

Advice and plan agreement 67,610 48,628 18,982

Contractor agreement 178,894 168,572 10,322

Qualitative control and workshop oversight 14,942 14,559 383

562,160 316,322 245,838

No significant post balance sheet event has occurred requiring adjustments or disclosures in the financial statements.

27. Post balance sheet date events

71

2015 2014

Party Relation-ship Type

Transaction description

Pricing method Amount

Balance of due to

(from)Amount

Balance of due to

(from)

A. Transactions subject to the Article 129 of the Commer-cial Code

Million Rials

Million Rials

Million Rials

Million Rials

OTC

Board of Directors Member

Allotment of expenses

Building rental agree-

ment1,199 13,199 2,400 14,258

Iran Central Deposi-tory and Settlement Co.

Board of Directors Member Rentals Rental

agreement 334 12,051 349 14,187

Bank Tejarat

Board of Directors Member Rentals Agreement 840 306 694 -

Saba Tamin Broker-age


Rentals Agreement 443 - 328 -

Trading system and

membership fees

Regulations 1,725 - 955 -

Stock Experts Bro-kerage


Rentals Agreement - - 404 -

Trading system and

membership fees

Regulations 619 - 980 -

Tosse-eh Farda Brokerage


Rentals Agreement - - 165 -

Trading system and

membership fees

Regulations 580 - 950 -

Bank Tejarat Bro-kerage


Rentals Agreement 372 - - -

Trading system and

membership fees

Regulations 1,953 - - -

Mofid brokerage


Rentals Agreement 1,352 - - -

Trading system and

membership fees

Regulations 2,875 - - -

B. Other related parties

Securities and Exchange Organi-zation

Supervisor RentalsAgreement & Regula-

tions27,126 339 24,202 )3,858(

28. Related parties transactions

72

29. Earnings per share

30. Retained earnings at the end of the year:

Net earnings per share included in the income statement, have been calculated based on the common shares number )900 million shares(. Net earnings per share as amounted 364 Rial consist of 203 Rial earnings from operating activities and 161 Rial from non operating activities.

Amount Million IRR

Legal duties:

Division of minimum 10% of net profit according to the Article 91 of the Com-mercial Code as amended.

32,738

Board of Directors proposal:

Dividend proposed by Board of Directors )100 IRR per share( 90,000

Retained Earnings allocation depends on general assembly approval:

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